Research License and Option Agreement

Execution Copy


RESEARCH LICENSE AND OPTION AGREEMENT


This License Option Agreement (the "Agreement"), effective as of April 6, 1998 (the "Option Effective Date") is made by and between Abgenix, Inc., a Delaware corporation ("ABX") and Genentech, Inc., a Delaware corporation ("GNE") with reference to the following facts and circumstances.


RECITALS


A. ABX has rights in certain technology relating to certain strains of XenoMouse (TM) Animals (as described below);


B. GNE desires to use such XenoMouse Animals to generate antibodies to [*] (as defined below);


C. ABX is willing to grant to GNE, and GNE desires to obtain, a license to use XenoMouse Animals solely for immunization with [*] for research purposes, as described below and on the terms and conditions set forth herein;


D. ABX has immunized XenoMouse Animals using [*] material provided by GNE pursuant to that certain Materials Transfer Agreement between GNE and ABX effective as of [*] (as defined below, the "MTA"); and


E. ABX is willing to grant to GNE, and GNE desires to obtain, an option to enter into the [*] Product License Agreement with respect to Products derived from immunization of XenoMouse Animals with [*], all as described fully below and on the terms and conditions set forth herein.


NOW THEREFORE, for and in consideration of the covenants, conditions, and undertakings hereinafter set forth, it is agreed by and between the parties as follows:


1. DEFINITIONS


For purposes of this Agreement, the terms set forth in this Article shall have the meanings set forth below:


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1.1. The terms "ABX In-License," "ABX Know-How," "ABX Patent Rights," "Affiliate," "Antibody," "Derived" or "derived," "Excluded Technology," "Field," "Genetic Material," "GenPharm Cross License," "IND," "Independent Discovery," "JTI," "Licensed Technology," "MTA," "Product," "Product Antigen," "[*]," "Product License," "Sublicense," "Sublicensee," "Territory," "XenoMouse," "XenoMouse Animals," and "Xenotech Agreement" shall have the meaning ascribed thereto in the [*] Product License.


1.2. "GNE Option Agreement" shall mean this Research License and Option Agreement entered into by and between ABX and GNE effective as of the Option Effective Date (as defined in the introductory paragraph above), as the same may be amended from time to time.


1.3. "Option" and "Option Expiration Deadline" shall have the meanings described in Section 3.1 below.


1.4. "Research Field" shall mean the immunization of XenoMouse Animals with the Product Antigen and the use of XenoMouse Animals that are so immunized and materials generated in whole or part from XenoMouse Animals that are so immunized, in each case solely for the creation, identification, analysis, manufacture, research, and development of Products in the Field. For purposes of clarification, the Research Field shall not include, among other things: (i) the creation, breeding or development of mice or any transgenic animals, (ii) use in humans of materials derived in whole or part from the XenoMouse Animals, (iii) use of XenoMouse Animals or materials derived in whole or part from XenoMouse Animals (including without limitation Products) for any purpose other than the creation, identification, analysis, manufacture, testing, research and development of Products for human medical uses, or (iv) the transfer, sale, lease, offer for sale or lease, or other transfer of title to XenoMouse Animals or any materials derived in whole or part from the XenoMouse Animals. For purposes of further clarification, it is understood that "immunization" of XenoMouse Animals with the Product Antigen includes the immunization of XenoMouse Animals with any formulation or construction of the Product Antigen, regardless of the three dimensional configuration of the Product Antigen, including, but not limited to, cell lines expressing the Product Antigen on their cell surface and chimeric molecules containing the Product Antigen; provided, however, that any research, development or use of Antibodies that do not bind to the Product Antigen (other than to determine whether they bind to the Product Antigen) shall be outside of the scope of the licenses granted hereunder or under the [*] Product Licenses.


1.5. "Research Plan" shall mean the research plan agreed upon by the parties for work by the parties in the Research Field, which is attached hereto as Exhibit A and incorporated herein, as the same may be amended from time to time.


1.6. "[*] Product License" shall mean that certain agreement between the parties (if entered into at all) in the form attached hereto as Exhibit B and incorporated herein, as the same may be amended from time to time.


[*] Certain information on this page has been omitted and filed separately
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2. SUPPLY OF MICE AND MATERIALS; RESEARCH LICENSE


2.1 Supply of XenoMouse Animals and Hybridomas. Subject to the terms and conditions of this Agreement, including those set forth in Section 2.2 below:


2.1.1 Hybridomas. As soon as practicable, but in any event, not less than ten (10) days after the Option Effective Date, ABX shall provide GNE with reasonable quantities of cells from hybridoma cell lines generated by ABX from immunization of XenoMouse Animals prior to the Option Effective Date with the Product Antigen provided by GNE pursuant to the MTA.


2.1.2 XenoMouse Animals. ABX agrees to provide to GNE, solely for use in creating Antibodies to [*] for the creation, identification, analysis, manufacture, research, development and commercialization of Products in accordance with this Agreement and the [*] Product License (if entered into at all by the parties), numbers and types of sterilized male XenoMouse Animals as follows: (a) as soon as practicable after the Option Effective Date, but in any event not later than twenty (20) days after the Option Effective Date, ABX will ship to GNE sterilized male XenoMouse Animals of the sterilized male XenoMouse Animals of the types, strains and quantities specified in item number 19 of the Research Plan. If, before ABX has provided to GNE all the XenoMouse Animals that ABX is required to provide under this Agreement and/or the [*] Product License (if entered into at all by the parties), ABX develops and has available for shipment to GNE a strain of transgenic animals that produce human antibodies that was not available on the Option Effective Date (such a strain referred to herein as a "New Strain"), ABX agrees to inform GNE and discuss whether GNE would prefer to receive animals from the New Strain. Upon request of GNE, ABX will agree to substitute a reasonable number of animals from the New Strain in place of an equal number of XenoMouse Animals, of the types and strains specified in the Research Plan, to be shipped to GNE under this Agreement; provided that any such animals shall be deemed to be XenoMouse Animals for purposes of this Agreement (including, without limitation, Section 2.2) and the [*] Product License. GNE shall use XenoMouse Animals or animals from the New Strain provided hereunder only for conducting the research set forth in the Research Plan and/or for work in the Research Field, all in accordance with this Agreement.


2.1.3 Research. GNE and ABX shall each conduct those research activities specified for such party as outlined in the Research Plan attached hereto as Exhibit A. The parties may amend the Research Plan (including, without limitation, the number and type of XenoMouse Animals to be provided to GNE) only by mutual written agreement. During the term of this Agreement, GNE and ABX shall each update the other, as requested by the other, as to the status of any research activities of the party under the Research Plan. It is understood that, except as expressly provided in the Research Plan or as the parties may otherwise agree in writing, GNE shall be responsible for conducting all other research activities involved in the creation, research and development of Products, including without limitation immunizations of XenoMouse Animals with the Product Antigen, screening of Antibodies generated from such immunizations, creation of hybridoma cells


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that produce Antibodies to the Product Antigen, production of Antibodies to the Product Antigen, and preclinical evaluation of Antibodies to the Product Antigen.


2.1.4 Payments. In consideration for ABX's research activities under the Research Plan, GNE shall pay ABX in accordance with the agreed-upon budget included in the Research Plan within thirty (30) days of receipt of invoice from ABX.


2.1.5 Ownership of Materials and Data. It is understood and agreed that:


(a) ABX shall solely own all XenoMouse Animals, Genetic Material encoding such XenoMouse Animals, Antibodies, Genetic Material encoding such Antibodies, hybridomas and B cells.


(b) GNE shall own all reagents, samples, data, results, technical information, know-how, preclinical and/or clinical testing data and any other non-patentable information resulting from the parties' use of the Licensed Technology related to the Product Antigen under the MTA or under this Agreement.


(c) With respect to any materials (including, without limitation, all Antibodies, hybridomas or Genetic Material) generated in whole or in part from immunization of XenoMouse Animals with the Product Antigen and/or data made or generated under the MTA, this Section 2.1.5 hereby supersedes and cancels any terms or provisions in the MTA inconsistent with this Section 2.1.5 or any other term of this Agreement. The transfer of physical possession of any materials owned by, and the physical possession and use of such materials and/or data by, GNE or ABX, as the case may be, shall not be (nor be construed as) a sale, lease, offer to sell or lease, or other transfer of title of such materials and/or data to GNE or ABX, as the case may be.


2.2 Supply of XenoMouse Animals and Materials; Material Transfer Terms. It is understood and agreed that all XenoMouse Animals, and all materials derived in whole or part from XenoMouse Animals, provided by ABX to GNE are provided solely for use in accordance with, and subject to, the following terms and conditions:


(a) all XenoMouse Animals transferred to GNE shall be the property of ABX, and the transfer of physical possession to GNE, and/or possession or use by GNE, of XenoMouse Animals shall not be, nor be construed as, a sale, lease, offer to sell or lease, or other transfer of title to any XenoMouse Animals;


(b) all XenoMouse Animals and all materials derived in whole or part from the XenoMouse Animals shall remain in the control of GNE and shall not be transferred to GNE's Affiliates or Sublicensees or any other party (other than ABX), except as expressly permitted under the [*] Product License (if entered into by the parties hereto);


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(c) GNE shall not attempt to use the XenoMouse Animals, or any materials derived in whole or part from the XenoMouse Animals (including Genetic Materials) to reproduce the XenoMouse Animals or to generate or produce other transgenic mice or other transgenic animals;


(d) The XenoMouse Animals shall be delivered to GNE solely for the purpose of performing the research activities set forth in the Research Plan and work in the Research Field, and GNE shall not use the XenoMouse Animals for any purpose other than immunizing the XenoMouse Animals with [*] and subsequent use of such immunized XenoMouse Animals and materials derived therefrom as reasonably necessary for creation, manufacture, testing, use, identification, analysis, research, and for development and commercialization of Products pursuant to the [*] Product License;


(e) GNE shall not transfer, sell, have sold, lease, offer to sell or lease, or otherwise transfer title to (i) any XenoMouse Animals, (ii) cells derived in whole or part from the XenoMouse Animals (including without limitation hybridomas), or (iii) except as provided in Section 2.2(f) below, any other materials (including without limitation Antibodies and Genetic Materials) derived in whole or part from the XenoMouse Animals;


(f) GNE shall not transfer, sell, have sold, lease, offer to sell or lease, otherwise transfer title to, or otherwise distribute or commercialize any Antibody or Product without first entering into the [*] Product License with ABX;


(g) GNE shall not use the XenoMouse Animals to make or use antibodies to any antigen other than the Product Antigen or immunize the XenoMouse Animals with any antigen other than the Product Antigen;


(h) Upon expiration or termination of this Agreement for any reason, GNE shall destroy (or return to ABX) each XenoMouse Animal and certify such destruction, except as otherwise provided in the [*] Product License (if entered into by the parties);


(i) ABX shall own all right, title and interest in and to all inventions and intellectual property (whether patentable or nonpatentable) made or created by GNE (and by any of its agents or employees on behalf of, or under authority of, GNE) through any use of the XenoMouse Animals (and/or materials derived in whole or part from the XenoMouse Animals) which is not in accordance with the terms and conditions set forth in this Section 2.2;


(j) Unless otherwise agreed by ABX in advance in writing, all XenoMouse Animals delivered to GNE shall be delivered to GNE's facilities in South San Francisco, California, and such XenoMouse Animals shall not leave such facility (except for return to ABX); and


(k) XT shall be a third-party beneficiary of the commitments by GNE set forth in items (a) through (g) above.


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2.3 Research License. Subject to the terms and conditions of this Agreement (including without limitation compliance with the provisions of Section 2.2), ABX agrees to grant, and hereby grants, to GNE an exclusive license and sublicense of its rights, as the case may be, under the Licensed Technology, without right to grant further sublicenses, (i) to use the XenoMouse Animals provided by ABX in the Research Field solely for immunization with the Product Antigen and for conducting the creation, identification, analysis, manufacturing, research and development work set forth in the Research Plan or work in the Research Field, (ii) to use the Licensed Technology other than XenoMouse Animals (but including materials derived from XenoMouse Animals) for research and development work within the scope of the Research Field, including for work with ABX under the Research Plan in the Research Field and for other GNE work in the Research Field. The parties acknowledge that while ABX is granting GNE an exclusive license of its rights within the Research Field, ABX's rights may not be exclusive from ABX's licensors. The license and sublicense rights granted under this Section 2.3 shall terminate on the Effective Date (if any) of the [*] Product License between ABX and GNE or, in the event that GNE has not exercised the Option by the Option Expiration Deadline, on such Option Expiration Deadline.


2.4 Limitation. Notwithstanding any other provision of this Agreement, in no event shall GNE (a) file, or authorize any third party to file, an IND (or a similar filing with an equivalent agency or regulatory body in any country) with respect to a Product or (b) initiate, or authorize any third party to initiate, clinical trials in humans with respect to a Product or (c) sell, or authorize any third party to sell, a Product, unless and until GNE has entered into the [*] Product License.


2.5 Compliance with Laws. Each party shall only use the XenoMouse Animals and materials derived in whole or part from the XenoMouse Animals (including without limitation any hybridomas, Antibodies, and Genetic Material) in compliance with all applicable laws and regulations, including all applicable National Institutes of Health guidelines, and each party agrees that such materials will not be used in humans, except in accordance with all applicable regulations and laws. The parties acknowledge that ABX's obligations under the preceding sentence applies only to ABX's use of the XenoMouse Animals and materials derived in whole or in part from the XenoMouse Animals pursuant to this Agreement. Each party acknowledges that the XenoMouse Animals, and all materials generated in whole or part from the XenoMouse Animals, are experimental in nature and may have unknown characteristics and therefore agrees to use prudence and reasonable care in the use, handling, storage, transportation, disposition and containment thereof.


2.6 Use Only For Products; No Implied Rights. GNE agrees that it shall not use the Licensed Technology (including, without limitation, XenoMouse Animals, Antibodies, Antibody-secreting cells, Genetic Material encoding the foregoing, or any other material derived from the XenoMouse Animals) except in the course of conducting research activities within the Research Field (and as may be permitted under the terms of the [*] Product License, if entered into by the parties). It is understood and agreed that no implied licenses or rights are conveyed to GNE under this Agreement, and that no license or other right shall be created hereunder by implication, estoppel


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or otherwise, and that GNE shall not sell, lease, offer to sell or lease, otherwise transfer title to or commercialize materials derived in whole or part from the XenoMouse Animals, except as expressly provided under the [*] Product License (if entered into at all by the parties).


3. OPTION TO OBTAIN [*] PRODUCT LICENSE


3.1 Option. Subject to the terms and conditions set forth in this Agreement, ABX hereby grants to GNE an exclusive option (the "Option") to obtain the right to enter into the [*] Product License between GNE and ABX, which Option may be exercised by GNE pursuant to the procedures set forth in this Article 3 on or before 5 o'clock p.m. (Pacific Time) on December 10, 1998 (the "Option Expiration Deadline").


3.2 Exercise of Option.


3.2.1 Exercise. To exercise the Option, GNE must give ABX written notice (the "Exercise Notice") stating that GNE desires that ABX (a) obtain the Product License for the Product Antigen between ABX and XT and (b) enter into the [*] Product License with GNE. GNE's exercise of the Option shall be effective upon timely receipt by ABX of the Exercise Notice. In the event that ABX has not received the Exercise Notice on or before the Option Expiration Deadline, the Option shall immediately terminate.


3.2.2 Obtaining Product License from XT to ABX for [*]. As soon as practicable after GNE's exercise of the Option (if any) in accordance with Section 3.2.1 above, ABX shall exercise its option under the Xenotech Agreement to obtain a Product License from XT. In the event that GNE timely exercises the Option, ABX shall enter into such Product License with XT as soon as reasonably practicable and in any event prior to when GNE and ABX enter into the [*] Product License, and ABX shall send written notice to GNE at such time ABX has entered into such Product License with XT, together with a complete copy (excepting only financial terms) of the fully signed Product License. At such time as ABX enters into such Product License and notifies GNE thereof as required hereunder, GNE and ABX shall promptly execute the [*] Product License as set forth in the form attached hereto as Exhibit B. If GNE timely exercises its Option hereunder, ABX shall use its best efforts to enter into the specified Product License with XT and the [*] Product License with GNE by not later than 5 o'clock p.m. (Pacific Time) on December 31, 1998. If GNE timely exercises its Option hereunder and ABX fails or is unable to enter into the specified Product License with XT and the [*] Product License with GNE by not later than 5 o'clock p.m. (Pacific Time) on December 31, 1998, GNE shall (subject to the notice and cure provisions of Section 8.3) be entitled to all available remedies conferred on it under this Agreement and by law or in equity. Subject to the foregoing and to the proviso at the end of this sentence, it is understood that once GNE has exercised its Option, GNE shall be obligated to enter into the [*] Product License and promptly thereafter pay ABX the License Fee as set forth in Section 3.1 thereof, it being understood and agreed that if GNE fails or is unwilling to enter into the [*] Product License after having exercised the Option and unless such failure is due to inaction of ABX or breach of ABX of


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its obligations, then GNE shall pay to ABX an amount equal to such License Fee within fifteen (15) days of the date that ABX offers to execute and enter into the [*] Product License with GNE; provided, however, that in the event that anything is contemplated to be set forth on Schedule A of the [*] Product License, GNE shall not be obligated to enter into such [*] Product License or pay the amount set forth in this sentence. It is understood and agreed that, notwithstanding any other provision of this Agreement, in the event that the Product License entered into by ABX with XT is a "Qualified Exclusive Worldwide Product License" rather than an "Exclusive Worldwide Product License" (as each term is defined in the Xenotech Agreement), then (a) GNE shall not be obligated to enter into the [*] Product License with ABX or pay the amount set forth in the previous sentence, (b) ABX shall not, if ABX used commercially reasonable best efforts to obtain an "Exclusive Worldwide Product License," be in breach of this Agreement and (c) in the event that GNE enters the [*] Product License notwithstanding the fact that the Product License is a "Qualified Worldwide Exclusive Product License", then the definitions of "Product License" and "Territory" in the [*] Product License shall be amended accordingly, and the parties shall make such other changes as are necessary to reflect the nature of the Product License.


3.2.3 Third Party Rights. It is understood and agreed that the grant of rights under Articles 2 and 3 hereof shall be subject to and limited in all respects by the terms of the applicable ABX In-License(s) pursuant to which ABX acquired or does acquire any Licensed Technology, including, without limitation, any rights granted to or retained by GenPharm International, Inc. under the GenPharm Cross License, and that all rights or sublicenses granted under this Agreement shall be to the extent that ABX may grant such rights and sublicenses under such ABX In-Licenses.


3.2.4 Definition of [*] Antigen. ABX shall use commercially reasonable efforts to establish as the definition of [*] under the Xenotech Agreement the same definition of [*] as is established under this Agreement, it being understood and agreed, however, that the precise definition of the [*] Antigen defining the rights licensed to ABX under the Product License (and the definition in the corresponding [*] Product License) shall be as established in accordance with the Xenotech Agreement.


3.2.5 Use by ABX. It is understood that if GNE does not exercise its Option on or before the Option Exercise Deadline and enter into the [*] Product License with ABX, ABX shall be entitled, in its sole discretion, to exercise ABX's rights under the Xenotech Agreement and enter into the Product License related to the Product Antigen with XT on ABX's own behalf or on behalf of a third party without further obligation to GNE, and ABX shall not be obligated to enter into the [*] Product License with GNE. Notwithstanding the foregoing, nothing in this Section 3.2.5 shall entitle ABX (a) to license or make any other use of any technology, know-how, intellectual property, materials (including, without limitation, any Antibodies, Antibody secreting cells, hybridomas or Genetic Material) or data owned by GNE, ABX, owned jointly by GNE and ABX, and, in each case generated in whole or in part from GNE's or ABX's activities under this Agreement or the MTA in any case without first obtaining GNE's prior written consent, except as expressly provided in this Agreement.


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3.2.6 Non-Use of Materials. ABX shall not license or make any other use of any material (including, without limitation, any Antibodies, B-cells, hybridomas or Genetic Material) owned by GNE or ABX, or owned jointly by GNE and ABX, in each case generated in whole or part from GNE's or ABX's activities under this Agreement or the MTA, except as expressly provided in this Agreement, in any case without first obtaining GNE's prior written consent. ABX shall not, license or use any technology, know-how, intellectual property or data owned by GNE or ABX, or owned jointly by GNE and ABX (in each case generated in whole or part from GNE's or ABX's activities under this Agreement or the MTA) in order to make or sell Products, except as expressly provided in this Agreement, in any case without first obtaining GNE's prior written consent.


4. INTELLECTUAL PROPERTY


4.1 Ownership of Intellectual Property.


4.1.1 Intellectual Property Concerning Antibodies, Cells, and Genetic Material. GNE and ABX shall jointly own all right, title and interest in patent or patent applications directed to inventions solely or jointly made, conceived, reduced to practice, or otherwise developed by GNE and/or ABX in the course of performing research or development work under the MTA, this Agreement, or the [*] Product License that are directed to (i) Antibodies, (ii) hybridoma cells that secrete or express Antibodies, and/or (iii) Genetic Material encoding Antibodies. This Section 4.1.1 hereby supercedes and cancels any term or provision of the MTA that are inconsistent with this Section 4.1.1 to the extent that such term or provision of the MTA relate to the Product Antigen. It is understood and agreed that nothing in the Section 4.1.1 shall convey, or be construed to convey, title in or to the biological materials themselves embodying any such jointly-owned inventions to GNE or ABX, as the case may be.


4.1.2 Intellectual Property Concerning Other Inventions. Except as otherwise provided in Section 4.1.1 and 2.1.5 above, on and after the effective date of the MT ...